Mexican Peso depreciates as US producer inflation rise lifts USD

• Mexican Peso faces losses against a resurgent US Dollar, reacting to positive US retail and inflation reports.
• Banxico Deputy Governor Mejia signals potential for early interest rate cuts, which weighs on the Mexican currency.
• US economic strength challenges Fed’s easing timeline as traders trim rate cut bets for June’s meeting.

The Mexican Peso (MXN) posts minimal losses against the US Dollar (USD) after robust economic data from the United States might deter the US Federal Reserve (Fed) from cutting rates in the first half of 2024. Bank of Mexico (Banxico) Deputy Governor Omar Mejia opened the door for an interest rate cut in a podcast on Wednesday, emphasizing that it is not premature due to the bank’s high rate level. The USD/MXN trades at 16.69, gaining 0.20%.

Market mood is negative, as reflected by US equities printing losses. The US Commerce Department revealed that Retail Sales in February improved compared to January’s plunge. At the same time, the Bureau of Labor Statistics (BLS) revealed that inflation on the producer side climbed, sparking a jump in the Greenback.